Bethany opened a store credit card to purchase a TV for $589. She put the entire purchase on the credit card. Her APR is 29.99% and the minimum payment is 5%. Assuming she makes only minimum payments, what is the remaining balance on her card after 3 months?
1 answer:
Original debt = $589 APR = 29.99% The monthly rate is 0.2999/12 = 0.02499 After 1 month: Amount owed = 589*1.02499 = $603.72 5% payment = 0.05*603.72 = $30.187 New balance = $603.72 - 30.187 = $573.53 After 2 months: Amount owed = 573.53*1.02499 = $587.87 5% payment = 0.05*587.87 = $29.39 New balance = 587.87 - 29.39 = $558.48 After 3 months: Amount owed = 558.48*1.02499 = $572.44 5% payment = 0.05*572.44 = $28.62 New balance = 572.43 - 28.62 = $543.82 Answer: $543.82
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